Robert S. McElvaine: Want to Avoid Another Depression? Try Understanding the First One

“I have seen the future, and it works,” journalist Lincoln Steffens famously said of his 1919 visit to Bolshevik Russia. Guided by his economic faith, Steffens saw the future as he wanted it to be, not as it would be.

What excuse do we have when we follow people who, guided by a different economic faith, see the past as they want it to have been, not as it was? Today, under the influence of leaders blinded to facts by certain faith, we are careening toward a repetition of mistakes that led to catastrophe....

Most people realize that a failure to raise the debt ceiling could be catastrophic. But the drastic cuts in federal spending that some Republicans are demanding in exchange for an increase in the debt ceiling would be a repeat of the mistakes that prevented a full recovery in the 1930s and then caused a secondary collapse in 1937. Enacting these cuts is the most likely scenario in which the current recession could become a new depression....

Conservatives appear to be united behind a set of beliefs that are dangerously wrong. Theirs is a faith-based economics that contrasts with fact-based economics; their god is named the Market. Their economics is as immune to facts as its opposite, Marxism. Call it Marketism. A devout Marketist believes that the Market is always right and any government intervention is, well, sinful....